general

U.S. passenger airlines have added nearly 194,000 jobs since 2021 as companies went on a hiring spree after spending months in a pandemic slump, according to the U.S. Department of Transportation. Now the industry is cooling its hiring. Airlines are close to their staffing needs but the slowdown is also coming in part because they’re facing a slew of challenges. A glut of flights in the U.S. has pushed down fares and eaten into airlines’ profits. Demand growth has moderated. Airplanes are arriving late from Boeing<br/> and Airbus, prompting airlines to rethink their expansions. Engines are in short supply. Some carriers are deferring airplane deliveries altogether. And labor costs have climbed after groups like pilots and mechanics signed new contracts with big raises, their first in years. Annual pay for a three-year first officer on midsized equipment at U.S. airlines averaged $170,586 in March, up from $135,896 in 2019, according to Kit Darby, an aviation consultant who specializes in pilot pay. Since 2019, costs at U.S. carriers have climbed by double-digit percentages. Stripping out fuel and net interest expenses, they’ll be up about 20% at American Airlines this year and around 28% higher at both United Airlines and Delta Air Lines from 2019, according to Raymond James airline analyst Savanthi Syth. It is more pronounced at low-cost airlines. Southwest Airlines’ costs will likely be up 32%, JetBlue Airways’ up nearly 35% and Spirit Airlines will see a rise of almost 39% over the same period, estimated Syth, whose data is adjusted for flight length.<br/>

European Union countries are considering delaying the introduction of EU-wide taxes on polluting aviation fuels for 20 years, as they seek a breakthrough on tax reforms that have been negotiated for years with little progress, a draft document seen by Reuters showed. The European Commission proposed an overhaul of energy tax rules in 2021 to make them more climate-friendly, including by gradually introducing taxes on fuels for flights within the 27-nation bloc, which currently escape EU-wide levies. After countries could not agree on earlier proposals that would introduce a minimum EU tax rate for jet fuel from 2028, they are now considering exempting both aviation and maritime fuels from these taxes for a further 20 years, a draft compromise seen by Reuters showed. "Since currently there is not enough sustainable alternative fuel (SAF) on the market, the taxation of aviation fuels would result in price increases of air tickets and not in a general switch from fossil fuels to SAF," the document said. Only small aircraft with a maximum of 19 seats, and boats used for "private pleasure navigation" would face minimum EU taxes before the 20 years are up, it said. For other aircraft and vessels, countries can introduce national levies if they choose - but they are not obliged to. Under the draft compromise, EU countries would reconsider in 15 years whether to start applying EU minimum tax rates to aviation and maritime fuel once the 20-year holiday ends.<br/>

Bad weather continued to disrupt travel at London’s busiest airports on Friday, as low visibility caused hundreds of flight delays and cancellations through the afternoon. As of 5 p.m. local time, about 30% of the flights at London Heathrow, Europe’s biggest hub, were delayed and about 4% of takeoffs and landings canceled, according to flight tracking firm FlightAware. About one-third of outbound services at London City airport were delayed, while more than half of the incoming flights at London Gatwick were late. British Airways was hit hardest with almost 300 delays and 70 cancellations. The airline didn’t respond to multiple requests for comment. The website FlightRadar24 showed some improvement in the afternoon, with average delays of about 22 minutes on arriving flights at Heathrow, and a 34 minute delay on departing flights. London City arrivals had 36 minute delays, while Gatwick showed 39 minutes. Some KLM flights into London City Airport, a favorite of business travelers, were diverted to London Southend airport outside the capital, the airline said in a statement. <br/>

Jazeera Airways will consider opening a new base outside its home in Kuwait if it finds the right opportunity, as the airline remains bullish on growth despite geopolitical tensions in the Middle East. The low-cost airline is focused on developing new direct routes from Kuwait to capitalise on strong demand and diversifying travel segments to capture more leisure and religious traffic, Jazeera Airways' new chief executive Barathan Pasupathi told The National. "For the foreseeable next 12 to 18 months, we are going to be very focused on Kuwait. But if and when a hub opportunity comes along that is attractive for Jazeera and the wider growth of our network, we will not be hesitant to look into it," Pasupathi said. Jazeera Airways, which in March last year announced plans to start a low-cost airline in Saudi Arabia to be based at the King Fahd International Airport in Dammam, has placed a bid for the licence and is optimistic about its chances. "We went through all the steps of a tendering process and completed the due diligence to establish a hub in Dammam, twice. We are still awaiting an official announcement," Pasupathi said. "We do believe we have the best credentials and have submitted the best plan but this is a tendering process so it can go either way." Saudi Arabia's General Authority of Civil Aviation did not respond to a request by The National for comment on the status of the bidding process.<br/>

The area around Seoul's Gimpo International Airport will be redeveloped into an Urban Air Mobility (UAM) hub by 2030, the Seoul city government said Sunday. The Gimpo Airport Innovation Zone, comprised of three blocks, will be built on 350,000 square meters of land in the Gimpo Airport Innovation District in western Seoul's Gangseo District, according to the city. The first block, now a parking lot for the airport's domestic terminal, will host a complex transfer facility, including a UAM take-off landing site. The UAM take-off and landing site will be located on the fifth to seventh floors of the facility. The second basement floor and the first floor of the building will feature a public transit transfer platform that gives riders access to taxis, subways and express buses. An elevator will connect the public transportation transfer facility and the UAM take-off and landing site. The project is scheduled to be completed by 2030. "Commercial and cultural facilities, international conference halls and hotels will also be built" on the site, the city added. The second block of the zone will feature aviation businesses and educational facilities, replacing the water pump stations currently installed in that area.<br/>

Singapore will start construction of a new mega terminal at Changi Airport in the first half of next year, aiming to lift the aviation hub’s annual passenger handling capacity by more than half, Prime Minister Lawrence Wong said. The new Terminal 5 would add capacity for another 50m passengers a year when operational in the mid-2030s, up from 90m, and would allow the aviation hub serve more than 200 destinations, from almost 150 now. “We will break ground for the construction of T5 in the first half of next year,” Wong said at a dinner on Friday celebrating the 40th anniversary of the nation’s civil aviation authority. Changi Airport is the busiest in Southeast Asia, handling almost 60m passengers last year as international travel bounced back from Covid. In the first half of this year, passenger traffic at Changi returned to almost 100% of pre-pandemic levels, Wong said. But other cities in the region have also been adding capacity in an effort to gain a bigger slice of a growing global market for air travel. Global passenger traffic is expected to double by 2042 to nearly 20b, according to Montreal-based Airports Council International. “Some have announced plans for mega airports that can handle more than 100m passengers a year,” Wong said. “So they are narrowing the gap with Singapore.” Vietnam is constructing a new airport near Ho Chi Minh City ultimately designed to serve more than 100m passengers, while Hong Kong is spending more than $18b to expand its international hub. Asia-Pacific accounts for 60% of all new airport projects in the world, according to aviation researcher CAPA.<br/>

Typhoon Yagi, Asia's most powerful storm this year, was downgraded to a tropical depression on Sunday, after wreaking havoc in northern Vietnam, where it damaged factories and infrastructure in export-oriented industrial hubs. Vietnam's meteorological agency issued the downgrade on Sunday but cautioned about the ongoing risk of flooding and landslides as the storm, the strongest to hit the country in decades, moved westwards. On Saturday, Yagi disrupted power supplies and telecommunications in Vietnam's capital, Hanoi, causing extensive flooding, felling thousands of trees and damaging homes. The typhoon and subsequent landslides and floods killed 21 people in Vietnam and injured 229, according to preliminary estimates from the government, after claiming the lives of four people on the southern Chinese island of Hainan and 20 in the Philippines, the first country it hit a week ago. Hanoi's Noi Bai international airport, the busiest in northern Vietnam, reopened on Sunday after closing on Saturday morning.<br/>

Almost all of Australia’s major airports including Sydney and Brisbane are vulnerable to the worst impacts of climate change, according to new analysis that spells out the threats to the multibillion-dollar investments favored by large pension funds. The travel hubs face significant fallout from storms, floods, heat waves and high winds in coming years, the Zurich-Mandala Climate Risk Index report said Monday. Some 94% of Australia’s 31 busiest airports are exposed to “multiple, very high risks with a very high level of impact,” the report said, giving them the most extreme risk rating possible. The findings are a warning to aviation infrastructure owners worldwide including IFM Investors, whose portfolio includes Sydney Airport, London Stansted and Vienna Airport. The impact of increasingly wild weather as the planet warms extends beyond airports. Runway closures disrupt airlines — led by Qantas Airways in Australia — passengers, freight deliveries and the broader supply chain. While the report offered some solutions to mitigate the risks, all of them come at a cost. For airport owners, they include investing in heat-tolerant runway surfaces, flood barriers and drainage channels. “If you think that risk is going to grow over time, your risk of flooding and all those other things, then you invest in greater resilience,” said Danny Elia, IFM’s global head of infrastructure asset management, adding the physical risk to assets was considered from the outset of any investment. “We’re always looking for alarm bells but there’s nothing material across our existing assets that I would ring the alarm bells on.” The index calculated for the first time the risk from climate change to Australia’s A$170b ($114b) tourism sector. It studied 178 sites, ranging from Sydney Airport and Bondi Beach to the Melbourne Cricket Ground and Uluru, using Intergovernmental Panel on Climate Change modeling and proprietary impact assessments.<br/>

Boeing reached a tentative deal on Sunday for a new contract with unions representing more than 33,000 workers, a significant step toward avoiding a strike that threatened to shut down production when the existing agreement expires later this week. The proposal, which has yet to be voted on by the workers, would be the first full agreement between the company and the unions in 16 years and would deliver raises of 25 percent over the four-year life of the contract. That falls short of the 40 percent the unions had sought, but includes other victories, including improvements to health care and retirement benefits, and a promise to build the company’s next commercial airplane in the Seattle and Portland regions.If approved, the deal would resolve one of the most pressing items on the agenda of Boeing’s new chief executive, Kelly Ortberg, who started a month ago. Mr. Ortberg, the former head of aerospace supplier Rockwell Collins, inherited a company in crisis after a panel blew off a 737 Max jet in January. Though no one was seriously injured, that episode reignited concerns from five years ago about the quality and safety of Boeing planes after two fatal crashes involving Max planes. It also shed light on Boeing’s shortcomings on quality control. The leadership of the unions — District 751 and the much smaller District W24 of the International Association of Machinists and Aerospace Workers — urged their members to approve the deal. “Negotiations are a give and take, and although there was no way to achieve success on every single item, we can honestly say that this proposal is the best contract we’ve negotiated in our history,” Jon Holden, president of District 751, and Brandon Bryant, president of District W24, said in the joint message. The unions mainly represent production workers who build commercial and military airplanes. District 751 is by far Boeing’s largest union, representing the vast majority of the workers governed by the proposed and existing contracts. Many of the workers live in the Seattle area, which is home to most of Boeing’s commercial airplane production.<br/>

Airbus deliveries fell in August after a sharp spike in the previous month, the European planemaker said on Friday, a decline which analysts said leaves it with the task of achieving solid year-on-year growth to meet an annual target. The planemaker said it had delivered 47 aircraft, down from 77 in July, to reach 447 so far this year. It aims to reach 770 deliveries for the whole year after revising the target down during the summer due to delays in receiving engines, cabin equipment and other parts. Industry sources have said the supply chain remains fragile, "August is typically a weaker month for Airbus in terms of deliveries," Jefferies analyst Chloe Lemarie said in a note, adding that Airbus needed to raise deliveries by an average of 7% a month compared to last year's pace to reach its target. Airbus booked 46 new orders including 30 previously announced A330neos for Cathay Pacific, and a rare order from a single "private customer" for three A350-900s and three A320neos worth well over $1b at catalogue prices that tend to be used for one-off purchases without commercial airline discounts.<br/>

Buying this week’s groceries or paying for a full tank of gas with a credit card might contribute more to the profits of the airline industry than buying a one-way ticket. That’s because frequent flyer programs have become a crucial part of the airline industry’s profitability. And that’s due to the billions of dollars banks and credit card issuers pay to buy bulk miles from airlines to reward and entice cardholders to make purchases with their cards. The typical airline passenger probably never thinks about the economics of frequent flyer programs, but the programs have become crucial for airlines to generate the profits needed to stay afloat. And loyalty programs have also caught the attention of federal regulators because of the central role they play in air travel today. Last year, Delta Air Lines received $6.8b in revenue from American Express on its co-branded Delta Amex card. American Airlines reported revenue of $5.2b from co-branded cards and other partnerships. United reported a mere $3.2b on its other operating line that came primarily on payments to its frequent flyer program. And when considering the adjusted incomes of 2023 for Delta ($4b) American ($1.9b) and United ($3.3b), it’s easy to understand why the major carriers rely so heavily on frequent flyer programs. “The airlines’ frequent flyer programs are their lifeblood; they’re the reason the airlines are in business,” said Zach Griff, senior aviation reporter for The Points Guy, a travel site that closely follows the programs. Story has more.<br/>